Small Business Plays a Waiting Game
Could 2009 be remembered as the year small business waited? Waited for new government plans and packages, waited for details, waited for credit to thaw, and waited for consumers to spend again. Let’s take a look at what’s been done for small business so far and whether it was worth the wait, as well as what might be coming for small business in the future and whether it will be worth waiting for.
- TARP and TALF. So far just a couple 4-letter-words, from a small business perspective… little trickle-down effect. Small businesses looking for cash will find credit is still tight.
- Obama’s new stimulus plan. There really are a lot of new tax advantages in this new stimulus plan, and small businesses should be looking at them closely with their accountants. The Federation of American Consumers and Travelers has released an outline of these changes titled “What Does the Stimulus Plan Mean to Your Small Business?” Only problem with many of these tax credits is you’ve got to have the cash flow and earnings to take advantage of the deductions. Oops!
- Geithner’s Financial Stability Plan. This plan aims to help small business by increasing SBA lending. SBA loans were down 57% last quarter from the same quarter a year ago. Check out this article on SmallOfficeCredit.com for details of the Small Business and Community Lending Initiative portion of the Financial Stimulus Plan. This initiative should help, but small business owners will have to wait and see.
- Obama’s budget blueprint. Announced today, it includes a plan to increase taxes on those who make $250,000 or more. Some small business owners will fall into this category. According to the Wall Street Journal, there is research that says less than 5% of small business owners make this much, but there is concern they could be among the high growth businesses that generate the most jobs. And hey, most small business owners will benefit from the middle class tax cut, and they should revel in the elimination of capital tax gains for small businesses.
- Obama’s speech to Congress. Obama said in his speech to Congress this week that there is a new lending fund being created that includes an effort to help provide loans to small businesses and entrepreneurs. Hopefully this will help with the credit crunch, but small businesses will have to wait and see. And what about the number one concern of small businesses for the past 20 years? (See “The Health Care Predicament: Will Obama Help Small Business?” on SmallOfficeCredit.com.) In his speech Obama said health care is “one of the major reasons small businesses close their doors,” and he said he was committed to health care reform, but no immediate solution was offered for small business owners who pay more for their health care coverage for employees, have fewer options, and get poorer coverage. I guess they’ll have to wait a bit longer.
Ultimately, the biggest concern for small business owners will be how long they will have to wait for customers to start spending again, and it’s not looking good for 2009.
